My Wife Wants to Get an MBA

Posted by 13 May, 2008 (1) Comment

My wife and I are under going a lot of changes this year and most likely for the next 2-3 years. One of the larger topics of discussion is graduate school. Is graduate school a good thing? In my opinion more education is good, but it’s nice to have a purpose (remember, I’m a cheap engineer) to justify the costs. She is interested in getting an MBA from a university in the DFW area with a concentration in marketing or management. She is looking at a public university because of the costs. We hope to be able to save for the tuition and pay for it out of pocket instead of taking out any more student loans (thank you UT Austin). She has a few reasons for getting an MBA. The first reason being that she’d like to earn more money. So will she earn more money if she obtains an MBA? It is not guaranteed, but she will more than likely be more marketable to a prospective employer. So to justify the costs of the MBA let’s take a look at the potential payoff. How long will it take to reach the “break-even” point, where the post MBA salary meets the old salary, plus the costs of MBA school? Using Forbe’s trusty calculator that I found on the blog Free Money Finance, here is the breakdown:

The three schools she is looking at are not listed in the calculator so I chose TCU as our sample school:

Pre-MBA Salary: $40,000

Costs: In-state tuition for an accelerated MBA: $40000 (rounded)     reference here

Post-MBA Salary: $75,000    reference here

Expected Growth rate: 13.5%  -via Forbes calculator TCU alum 1996

5 year MBA gain is $63,981

5 year MBA gain as a percentage of expenses is 52%

We will break even in 3 years and 9 months

Given this sort of pay out, it seems pretty reasonable that her working for an MBA is a financially worthwhile task. However, there is more to life than money which brings me to reason number two. She has had a desire for another degree for quite some time. She tried law school because a lot of people thought she would be a good lawyer, but in the end (actually the first day of law school) she decided it wasn’t for her. She sees an MBA with a concentration in marketing or management as a means to feel more accomplished and better about herself. She has her bachelors degree in English and a minor in government, obtained with the idea of going to law school and being a lawyer so it was justified. Since that is no longer her career path, she understandably feels a sense wanting to be valued which is what we all really want in life, isn’t it?

Categories : School Tags :